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Can’t trust council, builder wants out

The developer who bought the Town-owned land beside the new Village Square doesn’t want anything to do with town council and wants to sell.

[Originally published March 15, 2014]

Rainier Hummel, president of Sleek Developments Inc., who purchased the land for $100,000 last year, informed council of his decision in a strongly-worded letter to town council last week.

. . . continued

If the Town does not exercise its first-right-of-refusal, he will sell it to someone else. [Update: the Town declined the offer.]

The intention for the land was to construct ground-level commercial space and upper level residential in a building no higher than three stories in keeping with the architectural flavour of the area and complementary to the civic uses of the Village Square next door.

The terms of the purchase agreement required Hummel to accept “the seller’s desire to control development” and “refrain from presenting a development proposal that would conflict or contradict the efforts of the seller.”

In his letter, Hummel is clear that the Town has shown itself to be a poor partner in its dealings with the Molinaro Group on the Bay Beach partnership and the value of any development he may undertake would not be worth the headaches he expects to encounter.

The Town had failed earlier to attract a partner to jointly develop the property and then offered it for sale with conditions. Hummel’s was the only offer to purchase.

His letter reads as follows:

Mayor Martin and Members of Fort Erie Council:

Further to discussions with my partner, we have decided to sell our property at 283 Ridge Road North in Ridgeway and have ceased all development related works.

The outcome of the proposed Bay Beach condominium development concerns us. We look for these types of developments to act as a catalyst for upgrading the overall property inventory in an area. We feel the Bay Beach developer was poorly dealt with by municipal politicians. Molinaro invested significant time, energy and financial resources. They faced constant attacks from the community which we feel were supported by members of council. This seriously hurt their ability to market the units and then they were not given the extension to the agreement they needed to help overcome the challenges they faced. Refusing to grant an extension sends out a clear signal to every other developer. We are reluctant to invest any money into an area where elected representatives behave in this manner. In order to sell anything (especially condos) you must give the end buyer confidence and also create urgency. The actions of Fort Erie’s politicians were less than what would be expected from political leaders with a responsibility to the greater community. Why would a condo buyer want to put down a deposit to move into an area where you believe everyone hates you? Why would a buyer tie up capital for a deposit on a home that may never be built especially when you consider elected officials are publicly condemning it? You owed this developer the courtesy of extending the time you took from his marketing program. You chose not to do so, and this tells us everything we need to know to establish our risk threshold.

We don’t typically back down from a fight; however, the value of this property is far too small to be able to cover the cost of an appeal if the municipality all of a sudden decides they don’t like us. We cannot invest in an area where government decides who will be a winner and who will be a loser.

We believe your council needs to understand that we, as developers and employers, always look to see how our competitors are being treated before we make investments in an area. The Town’s conduct in this regard is reprehensible and we have no interest in risking capital in a community with this type of perspective.

As you are aware, the Town has the first right of refusal to buy back this property. Please let me know if you wish to exercise this right. If not, we will put the property up for sale.

Regrettably,

Sleek Developments Inc.

Rainier Hummel, president

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